The financial markets are currently gripped by a singular obsession: artificial intelligence. This manic focus has pushed sector leaders like Nvidia (NVDA) to staggering heights, with its valuation crossroad vaulting past the $5 trillion mark. Driven by seemingly insatiable infrastructure demand from cloud titans, investors are treating NVDA as a surefire bet.
Yet, beneath this euphoria lies a dangerous market asymmetry. As capital aggressively crowds into a handful of priced-to-perfection tech giants, exceptional value is being left behind in the wreckage of neglected sectors. While the market gladly pays extreme multiples for future AI promises, it is completely ignoring cash-generating machines hiding in plain sight—such as dating app pioneer Bumble (BMBL), which recently traded at a microscopic 2 times free cash flow.
My name is Inan Dogan. I am Insider Monkey’s cofounder and research director. I publish my personal stock picks in Insider Monkey’s monthly premium newsletters. In February I finally pulled the trigger and added Bumble (BMBL) to our monthly newsletter’s portfolio. Bumble was trading at 2 times free cash flow at the time. Its stock price was $2.75 at the time. I summarized my thesis as follows:
“Bumble (BMBL) is currently significantly undervalued, trading at a “deep value” entry point following its massive post-IPO correction. I believe that the company’s strong brand moat and high free cash flow generation provide a coiled-spring setup for a 300-400% recovery as management successfully executes its turnaround over the next few years.
Bumble’s stock price is finally cheap enough to provide an asymmetric risk-return opportunity. We don’t know the exact figures for the entire 2025, but BMBL generated $182 million in free cash flow during the first 3 quarters. The total figure should be around $240 million.
In late 2025, Bumble made a strategic move to purchase all outstanding TRA rights for $186 million in cash. While this was a significant one-time cash outlay, it eliminated a long-term liability and is expected to significantly improve the company’s future cash flow profile by removing annual payment obligations.
As of September 30, 2025, Bumble held $307.9 million in cash and equivalents against $589.4 million in total debt. If we add $60 million in free cash flow in Q4 and subtract the $186 million cash payment, we arrive at a total cash position of around $180 million. This means BMBL’s net debt is around $410 million at the end of 2026.
Basically we are buying the entire company (including its debt) at 3-4 times its cash flow.”
Today, Bumble disclosed that Ithaca Holdings will pay $6.05 per share. This is another Insider Monkey stock pick that more than doubled within a year (in this case 8 months). A year ago, I added Teva Pharmaceutical (TEVA) to our portfolio at $20. That stock is trading at $41 right now. We exited TEVA after an 80% gain earlier this year. We usually add one stock to our portfolio every month, so it isn’t like we are picking dozens of stocks and BMBL and TEVA are cherry picked.
Don’t get me wrong. I believe AI is the most transformative technology ever. It is bigger than the industrial revolution and a large portion of our newsletter’s portfolio is AI stocks, but not overpriced AI stocks. For example, there is an AI stock in our portfolio that is almost universally hated. Everyone hated BMBL which is why the stock was trading at two times free cash flow. This AI stock is so deeply unloved that you can currently buy it for less than the combined value of its cash and short-term investments. This is not some fringe player, either; it is a legitimate competitor with a real shot at winning its target market. If it succeeds, the stock has the potential to deliver a 10x return, if not more.
Conversely, even if the company fails to capture the market, the downside is highly protected. Because the stock trades below the value of its cash and investments, it is still likely to deliver positive returns over time. It is a rare, asymmetrical win-win situation—yet mainstream investors continue to despise it just as they did Bumble.
That’s where the value is in the stock market. The current macro environment presents an incredible opportunity for stock-pickers willing to look away from the AI glare. Chasing Nvidia at a multi-trillion-dollar valuation requires believing that the AI capex cycle will never top out. Buying a cash-flowing asset like Bumble at a rock-bottom multiple requires only a belief that human beings will keep interacting, and that cash flow still matters. Ultimately, the market will remember how to weigh cash over hype. When it does, the real winners won’t be those who bought the most expensive stocks on earth, but those who bought the most mispriced ones.
Before moving on, I want to emphasize that Ithaca Holdings is stealing this company at $6.05 per share. Even at this price, they are paying just 5 to 6 times cash flow and will likely take the company public again in a few years at twice its current valuation. Therefore, do not make the mistake of thinking they are overpaying for the stock.
Furthermore, I want to clarify that I am not shorting NVDA or holding a negative position against it. If the company manages to maintain its market dominance, the stock could easily post annual gains of 10% to 20% over the next couple of years. However, don’t be surprised if NVDA eventually experiences a valuation contraction and trades down to 10 times its earnings. Almost all of NVDA’s major clients are actively trying to develop proprietary versions of these chips to replace them—but that is a topic for another article.
